Microsoft is looking at alternatives to ultra-low-cost laptops in the drive to arm people in developing nations with a way to communicate and access the Internet, and the company is turning its sights on cheaper devices that can give people a start in computing, such as smartphones and shared computing.

The world's largest software maker has a few projects in the making, including a push to use mobile phones in computing and microfinance. Mobile phones have already made an impact in nations across the developing world, from India to Zimbabwe, enabling people such as farmers and fishermen to find better markets and prices. Handsets also give a person a way to be reached for jobs.

"Technologies like the mobile phone promise to take things like very small loans, microfinance, and allow them to operate in a very efficient infrastructure so that the price and the availability of financial products can be far broader, reaching out to everyone in society," said Bill Gates, chairman of Microsoft, in a speech at the Jakarta Convention Center last week. "We haven't achieved that yet, but that's an area where Microsoft and my foundation are working on and investing very heavily."

Microfinance is important because people in developing nations don't often have access to loans, and when they do, they face interest rates as high as 20 percent to 30 percent a day to loan sharks. The microfinance trend was made famous by Grameen Bank in Bangladesh.

Identity and billing are benefits of tying mobile phones to finance products. A mobile phone provides an identity, and cellular network operators can be part of the microfinance process through their billing processes.

One of the reasons companies are looking more to mobile phones for developing nations is because of the huge number of handset users worldwide, estimated at 3 billion, and widespread network coverage. Nearly 90 percent of the global population is covered by a mobile phone network, according to information from the GSM Association and CDMA Development Group.

Handsets are so popular in developing nations that those countries are finding novel ways to use the technology. For example, in Indonesia, a nation of 230 million people spread across 17,000 islands, the government has started allowing certain services and bill payments over mobile phones. The president of the country even set up a mobile phone number, 9949, so people can SMS to communicate directly with him.

"I was immediately buried in an avalanche of messages telling me what to do to solve the nation's problems and also scores of SMSes containing personal, including marital, problems. But my office has been able to cope very well," said Indonesian President Susilo Bambang Yudhoyono in a speech.

Microsoft is looking at ways to hook smartphones up to TVs to use the computing power and connectivity of the handset with the larger screen of the TV for a better, and cheaper, Internet experience in the developing world. The company began working on Fone+ a few years ago, and has tested prototypes proving such devices can lower the cost of computing for the poor.

The company still says ULPCs (ultra-low-cost laptop PCs) have an important role to play, but such devices are still expensive for developing nations, according to Craig Mundie, Microsoft's chief research and strategy officer, and the head of its Unlimited Potential Group, which works on projects for the poor.

"We would love to see an environment where every kid has their own laptop, and that is the long-term outcome that you ultimately want to strive for," he said in a recent interview. "But we're also realistic, given the number of kids that don't have anything today, that it's going to be a big lift for governments around the world to figure out how they'd buy even a $200 device for every kid."

That's why the company is working on projects such as Fone+ and MultiPoint, a technology where each student has his or her own mouse and unique cursor to use the same computer. That drops the price of computing dramatically, to one PC, a projector and 30 computer mice per classroom, instead of $200 per laptop.

"You have the opportunity to introduce the computer into the curriculum for every class there," he said. "Now that's not as good as every kid having their own laptop, and they don't get to take it home with them, which is a big loss, but it gets them started."

The idea of using ULCPCs as a way to bring computing to students in developing countries began with the One Laptop Per Child Foundation's (OLPC) $188 notebook. The XO originally started with an Open Source OS, but OLPC has worked with Microsoft on using XP, and Microsoft has dropped the price of a suite of Office software for such devices.

The fact that Microsoft and so many other organizations are concerned about bringing computing to the developing world is comforting to some people. The fear is that modern countries with access to IT and the Internet will continue to expand the gap in technological know-how over developing nations, a conundrum commonly referred to as the digital divide.

"With ICT, we now have the most potent weapon of all to break the vicious cycle of poverty and ignorance," said Yudhoyono, adding a warning: "Whether we like it or not, there is a digital divide. The gap is widening between the information technology 'haves' and 'have-nots.' There is a real danger that the world's poor will be virtually excluded from the emerging knowledge-based global economy -- with dire consequences to global peace and security."

News reports this week that the U.S. Department of Justice is formally reviewing a proposed advertising deal between Google and Yahoo came as no surprise to some tech trade groups and advocacy groups based in Washington, D.C.

A Washington Post story Wednesday saying the DOJ had launched a formal investigation of the ad deal wasn't much of a shocker to Google and Yahoo, either, as the two companies had voluntarily delayed the implementation of the deal for more than three months in recognition that the DOJ would look at the antitrust implications.

A DOJ spokeswoman said Wednesday that the agency has acknowledged since mid-June that it was looking into the deal. A public confirmation that the DOJ is examining the deal amounts to a "formal investigation," she said.

Google said it is cooperating with the DOJ.

"We are continuing to have cooperative discussions with the Department of Justice about this arrangement, and voluntarily delayed implementation for three and a half months in order to give them time to understand the agreement," said Adam Kovacevich, a Google spokesman. "That process is continuing exactly as expected. We are confident that the arrangement is beneficial to competition, but we are not going to discuss the details of the process."

Google and Yahoo announced June 12 a deal to run some of Google's advertisements alongside Yahoo search results. The announcement came just hours after a proposed acquisition of Yahoo by Microsoft fell through, although Microsoft has continued to express interest in such a deal.

Google and Yahoo had run a test of the advertising program in April.

Still, with recent news of the DOJ investigation, representatives of two tech trade groups said they expected the agency would look into the deal.

"Even though serious antitrust problems are unlikely, it was appropriate for the parties to offer up a delay while regulators review the deal," said Ed Black, CEO of the Computer and Communications Industry Association, a trade group that has raised concerns about anticompetitive behavior in the tech industry. "This is a good provision to help everyone understand the facts surrounding the deal and make sure there is no harmful impact on competition or consumers."

A formal review was "inevitable," added Jonathan Zuck, president of the Association for Competitive Technology, a trade group often aligned with Google competitor Microsoft. The deal is between the number one and number two companies in the "crucial" online ad market, Zuck added.

"It's a very complex deal in a very complex market," Zuck said. "The deal raises a lot of questions that the DOJ must answer before letting it go."

Google has worked hard to structure a deal that would meet regulatory approval, he said. "The big question is whether Google could ever do enough to satisfy competition concerns over the consolidation of number one and number two players in the market."

The Center for Digital Democracy (CDD), an advocacy group focused on consumer privacy, called on the DOJ to reject the Google-Yahoo deal.

"Google has reached way beyond the proverbial tipping point when it comes to its dominance of the interactive ad business," said Jeffrey Chester, the group's executive director. "Yahoo's agreement to the deal is a desperate move acknowledging they can no longer compete with Google. The DOJ -- even a Bush Administration business-friendly one -- shouldn't permit Google to operate a key part of Yahoo's business."

Earlier this month, CDD asked the U.S. Federal Trade Commission to investigate how the deal could affect consumer privacy. "Privacy is at risk, as Google gains access to even more consumer data," Chester said.

A Trojan horse program that has been around for about six years is now being used to steal system-administrator passwords, including those at banking and brokerage houses, according to security researchers. And it could be that six years from now we'll still be talking about Microsoft's aim to buy Yahoo's search business, which could involve obtaining the entire company and breaking it apart. Meanwhile, early adopters will undoubtedly be out in force on July 11 to be among the first to buy the new iPhone 3G.

1. Report says Microsoft readying new try for Yahoo: Bill Gates said on his way out of his full-time gig at Microsoft that he thought a deal for his company to buy Yahoo was unlikely, but a couple of days later the Wall Street Journal reported that Microsoft is looking for partners -- Time Warner and News Corp. were named -- to help it obtain Yahoo's search business. So, to quote baseball legend Yogi Berra, "It ain't over 'til it's over." And this one clearly ain't over yet.

2. Trojan lurks, waiting to steal admin passwords: The Coreflood Trojan horse program lurks until a system administrator logs on to an infected computer and then steals the password, using a Microsoft administration tool to spread malware on the network. The malware is being used to swipe banking- and brokerage-account usernames and passwords. So far, criminals have infected hundreds of thousands of computers with Coreflood, including more than 14,000 in one global hotel chain.

3. iPhone 3G set for 8 a.m. debut on July 11 and AT&T dishes on iPhone rate plans: AT&T announced prices for iPhone 3G service, which are, of course, more costly than plans for earlier iPhones. The carrier also announced that the new iPhones will be on sale at 8 in the morning, local time, on July 11. That's earlier than Apple retail stores open, though someone who answered the phone at the flagship San Francisco Apple Store wouldn't say if the opening will be moved up two hours and suggested that a reporter ring back later. (There has to be some element of the launch that maintains an air of secrecy, eh?)

4. Microsoft eases hardware terms for XP on low-cost PCs: Although June 30 marked the end of Microsoft offering most licenses for its Windows XP operating system, the company is still pushing the OS for use in low-cost PCs and it has eased hardware restrictions. Low-cost PCs with touchscreens, larger screen sizes and bigger hard drives now are eligible to use XP.

5. Oracle reveals BEA roadmap: Since Oracle closed its $8.5 billion merger with BEA, questions have abounded as to how the two companies' technologies will mesh -- or if they will even mesh at all. This week, Oracle finally laid out its plans of what to do with BEA's technology, saying it plans to make BEA's application server Oracle's strategic Java container and pledging continued support for BEA customers.

6. Long-awaited JBoss AS 5.0 moves closer to release date: The release candidate of the long-awaited JBoss Application Server 5.0 will be out soon, according a blog posting from the chief technology officer of Red Hat's JBoss division. Product development started three years ago and stretched out as the company decided to make more changes to the next version.

7. DOJ continues probe of Yahoo-Google partnership: The U.S. Department of Justice continues to investigate the proposed advertising partnership between Yahoo and Google, a DOJ spokeswoman said this week. The Washington Post reported Wednesday that the DOJ had just initiated a formal antitrust investigation around the proposed deal, but the spokeswoman said that the probe under way was begun June 16. Regulatory scrutiny was widely expected.

8. Adobe, Google, Yahoo enabling Flash searches: Yahoo and Google are working with Adobe to facilitate Flash pages being returned as search results. The move could mean that millions of rich Internet applications that had previously been all but invisible to search engines will now become serachable.

9. Mozilla's Firefox 3 sets geeky world record: The 8,002,530 downloads of Firefox 3 in the first 24 hours after the browser's release made it into the Guinness Book of World Records for the most downloads in that time period. Mozilla set out to achieve the first-ever such record. "Our community members came together and not only spread the word, but also took the initiative to help mobilize millions of people to demonstrate their belief that Firefox gives people the best possible online experience," said Mozilla Vice President of Marketing Paul Kim. Or maybe they just wanted to be part of setting the record ...

10. Gartner: Seven cloud-computing security risks: Cloud-computing customers need to ask hard questions about security and should think about getting a third-party security assessment before choosing a vendor, analyst firm Gartner recommends. A Gartner report, "Assessing the Security Risks of Cloud Computing," lays out the areas of security concern.

Microsoft will release four security patches for its Windows, Exchange, and SQL products next Tuesday, all rated "important."

The Exchange and SQL flaws are "Elevation of Privilege" bugs, meaning that an attacker could theoretically exploit them to get administrative access to a PC. One of the Windows flaws is labeled a "spoofing" bug, meaning that it could help hackers trick the user into doing things like visiting malicious Web sites.

The fourth update fixes a Windows flaw that could allow an attacker to run unauthorized code on a victim's PC, Microsoft said. Normally, this type of flaw is rated "critical" by Microsoft, but in this case the bug was probably given a less-severe rating because it doesn't work without the user first taking some extra actions or adding special software or drivers, said Eric Schultze, chief technology officer at Shavlik Technologies.

This remote code execution flaw affects Windows Vista and Windows Server 2008.

The SQL vulnerability affects Microsoft's SQL Server software and the internal SQL software that ships with some versions of Windows. It does not affect Vista or XP users, but it does exist on the Windows 2000, Windows Server 2003 and Windows Server 2008 products.

Microsoft published a note on the upcoming security patches on its Web site on Thursday. Unless it is forced to rush out an emergency fix, the company releases its security patches on the second Tuesday of each month.

Microsoft also said Thursday that it is planning to upgrade the Windows Update software it uses to deliver bug-fixes to PC desktops.

The upgrade will speed up the software download process, said Windows Update Product Manager Michelle Haven in a blog posting. "Weve invested heavily in reducing the amount of time it takes the Windows Update agent to scan to see if new updates are available," he wrote. "In this case, weve seen some instances of the scan times on some machines decreasing almost 20 percent."

Microsoft plans to make further changes to the Windows Update software and back-end infrastructure over the next few months, Haven said.

A federal judge has agreed to put off a trial involving Visto's patent-infringement claims against Research in Motion, but limited RIM's ability to cause further delays.

The trial over mobile e-mail provider Visto's lawsuit against RIM had been set to begin next week. Visto sued RIM in 2006 in the U.S. District Court for the Eastern District of Texas, claiming its popular BlackBerry system infringed four Visto patents and asking for a shutdown of RIM's service as well as damages. But on Wednesday, Magistrate Judge Charles Everingham granted a stay of the trial, requested by RIM, because several of the patent claims involved are being re-examined by the U.S. Patent and Trademark Office.

RIM had requested the re-examinations, in which the patent office is studying the validity of certain parts of Visto's patents. But as a condition of the stay, the company can't ask for any more re-examinations, either directly or indirectly, the judge wrote. RIM also won't be allowed to challenge the validity of any of the patents during the trial by bringing up evidence that has already been considered in the re-examinations.

Earlier this week, the patent office validated 21 out of 22 claims in one of those patents, number 7,039,679, which involves technology for synchronizing e-mail between a mobile device and a LAN server.

Mobile e-mail, based on complex sets of technologies and rapidly growing in popularity, has been fertile ground for patent disputes. RIM came to the brink of a service shutdown in 2006 before settling a suit brought by NTP for $612.5 million. Visto has also aggressively defended its intellectual property, suing competitors including Good Technology, Seven, and Microsoft.

Apple's focus over the last year or so has been largely on the iPhone, leaving Mac developers who work in the enterprise market to pretty much fend for themselves. And that seems to be just fine for companies in a newly launched Mac enterprise group and even other Mac developers.

Earlier this week Atempo, Centrify, Group Logic, LANrev, and Parallels joined forces to form the Enterprise Desktop Alliance (EDA), a group of software developers dedicated to helping adopt the Mac--especially in larger companies with existing Windows-managed IT environments. Other Mac developers who cater to business customers think it's a good idea as well, and that it will help keep Apple focused on the end-user.

[ Special report: IT's guide to the Mac ] 

"I don't think Apple should be specifically target the enterprise," said Alykhan Jetha, president and CEO of Marketcircle (makers of billing and productivity management software). "It's not that I don't want those customers, because I do, but the enterprise market has fundamentally different requirements than you and I."

For example, those in the enterprise market may not be as willing to switch to a new operating system as quickly as individual consumers for fear of incompatibilities. Retraining employees on a new operating system can also be costly for large companies.

"This would slow us all down," said Jetha. "You won't see the type of innovation Apple shows from Microsoft because they have to cater to enterprise. If Apple caters to the enterprise like Microsoft, progress is going to slow."

That point is not lost on Tim Deal, senior analyst at market research form Pike & Fischer. "Apple has not tried to be everything to everyone and that has certainly been a key factor in its strong position of innovation," said Deal.

While Deal doesn't feel Apple does enough to promote its strengths in the enterprise market, he does think that Apple's focus on certain areas of the market over the years has been a winning strategy.

"Focusing on and having good reputation for those niche markets has really worked for them [Apple]," said Deal. "Those markets typically don't look anywhere else for their products."

Dennis Bilowus, president of FastTrack Scheduler-maker AEC Software, thinks that Apple should do more to promote itself in the enterprise, but recognizes that the company has been doing a much better job in the past year.

Bilowus points out that one of Apple's strongest niche markets, higher education, is also one of its biggest enterprise customers.

Of course, Apple's iPhone 3G, being released on July 11, will include many enterprise-targeted features as well. This will be another catalyst in getting Macs into the large companies as executives purchase iPhone and expect their IT departments to support them.

Overall, Mac developers seem pleased with Apple's position on the enterprise market. While a little more promotion might be nice, focusing on growing the business seems to be in everyone's best interest.

"When it comes to Apple, they have a long history of customers evangelizing for it," said Deal. "That puts the company in a unique position in the market. People will vehemently argue for the benefits of its products. That represents the unique nature of Apple."